GE Capital, Ohio State deal ‘dream come true’ for researchers

It started with the type of question that gets professorial minds racing.

GE Capital, the financial services arm of General Electric Co., does a lot of lending to middle-market companies, and told leaders of Ohio State University’s Fisher College of Business it knew the sector was an important part of the economy – but couldn’t find research on it.

“That statement in itself is kind of an academic dream come true,” said Fisher Dean Chris Poon. “I don’t think we started this with the idea this was going to morph into a five-year, $10 million relationship (complete) with a center.”

And yet that’s what has happened.

Ohio State on Oct. 6 disclosed GE Capital’s pledge to fund research at the newly established National Middle Market Center. It also will be a resource for businesses to network and for students to find careers, Poon said.

The partnership emerged after nine months of baseline study that Ohio State began at GE Capital’s request, Poon said. A faculty/student team found the sector is ill-defined simply because it is so diverse, spread across more ownership types and industries than either small or large businesses. But the sector is vast, accounting for about $3.8 trillion, or one-third, of the U.S. private-sector GDP, and employing about a third of the work force. And middle-market companies disproportionately grew through the worst of the recession, adding a collective 2.2 million jobs.

Poon said the center’s research could identify the management and cultural secrets of super-performing businesses and guide regulatory approaches.

“If we don’t understand the impact of regulatory legislative decisions,” she said, “there’s no hope that we can put our economy back on track.”

Unlike some industry-sponsored research, everything the center produces will be public.

“GE Capital will claim no proprietary ownership, which I think is one of the most philanthropic gestures I know of,” Poon said. “Clearly, they will benefit from this research, but anyone who cares about the middle market will benefit.”